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If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

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Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#31

Post by ghaff »

EstesPark wrote: post #18
dragontamer wrote: post #13

Because a large number of 401k plans are drawing upon stocks so that retired folk can live out their retirement. The boomers are retiring, and they're the first major group to retire under 401(k) program. They will be selling stocks and bonds (and whatever else they've invested into) and are no longer buying stocks with their end-of-career top-level paychecks.

Does anyone have an actual breakdown of how much the younger generations are placing away in a 401k - if that's even possible?

This article has one: https://www.fool.com/the-ascent/buying-stocks/articles/here-...

As you'd expect the contribution percentage increases with age (and the amount presumably increases even more). But even under 25s are at about 5% which is more than I would have expected though this is presumably just among people who have the option.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#32

Post by jlmorton »

notjoemama wrote: post #14
lame-robot-hoax wrote: post #9

Earlier quoted context omitted.

Under what definition is the US economy in a recession? People can keep clamoring for it, but the only recession the US is possibly in is a “vibes based” recession.

https://en.m.wikipedia.org/wiki/Recession https://ycharts.com/indicators/us_recession_probability Maybe because the current state implies a higher than normal probability of the US being in a recession? Kinda accounts for the vibes.

This is simply a measure of the yield curve, nothing more.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#33

Post by cheriot »

hammock wrote: post #25
mjevans wrote: post #8

This article strongly covers a major SYMPTOM of the problem. https://www.buzzfeed.com/suzystrutner/how-much-you-need-for-... Housing / land valuation is wildly off from the needs of the people. For more than literally my entire life there has been a chronic shortage of housing, with less built than is necessary for multiple decades of time. The issue has compounded. We are at the point where the solution is to litera…

>Housing / land valuation is wildly off from the needs of the people. For more than literally my entire life there has been a chronic shortage of housing If there is a housing shortage then the unaffordability is reflective of proper valuation. If people need more housing than they are getting, a free market would indicate valuations to go higher. I would suspect that you’d like to see housing revalued lower, though

> a free market

Housing supply is not a free market. At least in the US, there's a committee reviewing each parcel deciding how many sqft of interior space, how many kitchens, how tall, and what uses.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#34

Post by cma »

Scarblac wrote: post #30
cma wrote: post #19

Earlier quoted context omitted.

>with less built than is necessary for multiple decades of time. I thought there was more housing sqft per capita in the US than just about anywhere else? If so it seems more like a distribution problem.

US houses are very large. I don't think it's realistic to expect that multiple families will start living in houses intended for one, so the amount of sqft doesn't help as much.

> I don't think it's realistic to expect that multiple families will start living in houses intended for one

That is common in other countries, though it is usually a single extended family.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#36

Post by giantrobot »

lame-robot-hoax wrote: post #9
cable2600 wrote: post #2

Inflation and cost of living index. The economy is in a recession.

Under what definition is the US economy in a recession? People can keep clamoring for it, but the only recession the US is possibly in is a “vibes based” recession.

My paycheck has not increased in size relative to increase of prices of necessities. Every dollar going to necessities is a dollar that can't go to discretionary spending.

Lower discretionary spending for a long enough time means growth slows. The prices traders are willing to buy stocks is a function of a company's future growth prospects. Slowing growth rates makes for a recession.

Too many politicos define "strong economy" in terms of unemployment rates because they're simple scalar values. Full employment with high prices doesn't make for an environment where anyone can eke out margins.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#37

Post by pwarner »

abeppu wrote: post #7
cable2600 wrote: post #2

Inflation and cost of living index. The economy is in a recession.

Is that an explanation? I get that if GDP growth is less than inflation, then in real terms the economy is shrinking, even if nominal GDP goes up. But stock prices are in nominal dollars; steady stock prices (or prices increasing at the same rate as GDP) would mean a real decline in value. But explaining why prices for these stocks are falling in nominal terms should involve something about why they would grow slower…

Most reports of GDP growth use "real" dollars, that is inflation adjusted. Those continue to show growth. https://fred.stlouisfed.org/series/GDPC1 I mean, the math may be a bit off since measuring GDP and measuring inflation are both imperfect things, but they do try generally.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#38

Post by cma »

verdverm wrote: post #26
cma wrote: post #19

Earlier quoted context omitted.

>with less built than is necessary for multiple decades of time. I thought there was more housing sqft per capita in the US than just about anywhere else? If so it seems more like a distribution problem.

Absolute footage is the wrong metric of the average per household is also larger. You want to look at the number of units. One thing that can happen is a single family home split into multiple units

I believe the US is near the top in second homes per capita as well, and near at the top in owning additional homes on wheels (RVs).

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#39

Post by hammock »

lame-robot-hoax wrote: post #9
cable2600 wrote: post #2

Inflation and cost of living index. The economy is in a recession.

Under what definition is the US economy in a recession? People can keep clamoring for it, but the only recession the US is possibly in is a “vibes based” recession.

Perhaps there is a flaw in the measurement of nominal GDP, or in the measurement of the real GDP price deflator

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#40

Post by thegrim33 »

The market is:

- Down 1.x% the last month

- Up 2.x% YTD

- About equal over 6months

- Up 13% over last year

That's "tanking"? The article talks about 52-week lows. The market is up nearly 13% over that 52 week period.

How is this even newsworthy? Yes, the market goes up and down.

The next time the market goes up 1.X% will they post an article about how much the market is "surging" and how strong the market is?

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